AH v BH: Nuptial Agreement & Needs Principle

Since Vardags won the landmark Supreme Court case, Radmacher v Granatino, prenuptial agreements have had a new and important status in matrimonial law, and it is likely you will be bound by it if you divorce. 

When determining a financial settlement, the Court first looks for a nuptial agreement that outlines how the assets should be divided. Nuptial agreements specify the division of a couple’s assets and income, limiting the divorce court’s discretion in apportioning the wealth. 

Overview: AH v BH [2024] EWFC 125

The case of AH v BH [2024] EWFC 125 is a pivotal example of how UK courts may depart from the terms of a nuptial agreement when doing so is necessary to meet the needs of one party - especially where children are involved.

Key Principle:
While nuptial agreements carry significant weight following Radmacher v Granatino, they are not absolute. Courts retain discretion to override them if enforcing the agreement would result in unfairness.

Case Background:

• This case concerned a marriage of around 5.5 years including a period of cohabitation.
• The parties entered into a prenuptial agreement prior to the marriage which sought to ringfence the assets in the husband’s sole name, notably his business interests.
• The parties signed the prenuptial agreement with full knowledge of its meaning and consequences and with the benefit of legal advice, and the wife understood that it would severely limit her financial remedies claim on divorce.

The main issue in this case was the interplay between the prenuptial agreement and the financial needs of the wife as well as the two children of the marriage, to whom the wife is and will remain the primary carer.  

When the marriage broke down, the assets were significant with almost £50 million in the husband’s sole name in contrast to the wife’s assets of £291,000. The family home was in the husband’s sole name, but the wife had made financial contributions towards its renovation from sale proceeds of her flat. 

The wife did not dispute the validity of the prenuptial agreements but instead claimed that it should be departed from to meet her reasonable financial needs. 

Judgment: 

In leading the judgement, Mr Justice Peel departed from the prenuptial agreement.

He decided that the family home should be sold with the wife receiving 56.7% among other assets. The main points to note are that the wife’s role as the primary carer to the children for the rest of their minority was regarded as a powerful counterweight to pre-nuptial agreements as she had no alternative property of her own and cannot be expected to return to her corporate career.

Secondly, the nuptial agreement provided that it should be reviewed upon childbirth but never was, suggesting that it was contemplated to be unfair upon the birth of children. 

Legal Significance

Although the prenuptial agreement in this case complied with the conditions set out in Radmacher, Mr Justice Peel departed from its terms on the basis that it did not reflect the wife’s long-term responsibilities for the children and her lack of independent wealth in contrast to the husband. This decision emphasises the importance of ensuring that a nuptial agreement provides for important life events such as childbirth. Ensuring that needs can be met in these circumstances increase the likelihood of the agreement being upheld by the court on divorce. 

Need Expert Help?

Vardags offers unparalleled expertise in prenuptial agreements for high-net-worth individuals. Following our landmark success in Radmacher v Granatino, we have set the standard for drafting and enforcing agreements that safeguard substantial assets and complex financial interests, both domestically and internationally. To discuss how we can protect your wealth with a bespoke prenuptial agreement, contact our expert team today. 

Alternatively, if you’re concerned about how a nuptial agreement may affect your divorce settlement, especially where children or financial disparity are involved, our expert solicitors can help.

We offer a free initial consultation to qualifying individuals.

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